Atul Ltd 2010-11

12. Employee Benefits: a. Defined contribution plan: Company’s contribution paid | payable during the period to Provident Fund, Employees’ Deposit Link Insurance Scheme, Officer Super Annuation Fund, Employees’ State Insurance Corporation, and Labour Welfare Fund are recognised in the profit and loss account. b. Defined Benefit Plan: Gratuity: Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. The liability so provided is represented by creation of separate funds and is used to meet the liability as and when it accrues for payment in future. Actuarial gains | losses are immediately taken to profit and loss account. Long-Term Leave Encashment: Long-term leave encashment are provided for on the basis of an actuarial valuation carried out at the end of the year on the project unit credit method. Actuarial gains | losses are immediately taken to profit and loss account. c. Short-Term Employee Benefits: Short-term leave encashment are provided at undiscounted amount during the accounting period based on service rendered by employee. d. Voluntary Retirements: Compensation payable under the voluntary retirement scheme is being charged to profit and loss account. 13. Taxation: i. Income tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. ii. MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax within the specified period. iii. Deferred tax asset and deferred tax liability are calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets on account of timing differences are recognised, only to the extent there is a reasonable certainty of its realisation. Deferred tax assets are reviewed at each Balance Sheet date to reassure realisation. 14 Government Grants: i. Government grants are recognised when there is reasonable assurance that the same will be received. ii. Revenues grants for expenses incurred are reduced from the respective expenses. iii. Capital grants relating to specific fixed assets are reduced from the cost of the respective fixed assets. iv. Capital grants for project capital subsidy are credited to capital reserve. 92 | 93